Correlation Between SK Hynix and SS TECH
Can any of the company-specific risk be diversified away by investing in both SK Hynix and SS TECH at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SK Hynix and SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and SS TECH, you can compare the effects of market volatilities on SK Hynix and SS TECH and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SK Hynix with a short position of SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and SS TECH.
Diversification Opportunities for SK Hynix and SS TECH
Good diversification
The 3 months correlation between 000660 and 101490 is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH and SK Hynix is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SK Hynix are associated (or correlated) with SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of SK Hynix i.e., SK Hynix and SS TECH go up and down completely randomly.
Pair Corralation between SK Hynix and SS TECH
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.16 times more return on investment than SS TECH. However, SK Hynix is 1.16 times more volatile than SS TECH. It trades about 0.04 of its potential returns per unit of risk. SS TECH is currently generating about -0.05 per unit of risk. If you would invest 16,941,900 in SK Hynix on August 29, 2024 and sell it today you would earn a total of 768,100 from holding SK Hynix or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. SS TECH
Performance |
| Timeline |
| SK Hynix |
| SS TECH |
SK Hynix and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and SS TECH
The main advantage of trading using opposite SK Hynix and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, SS TECH can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SS TECH will offset losses from the drop in SS TECH's long position.| SK Hynix vs. Finebesteel | SK Hynix vs. Gyeongnam Steel Co | SK Hynix vs. Jeil Steel Mfg | SK Hynix vs. Echomarketing CoLtd |
| SS TECH vs. Daou Data Corp | SS TECH vs. Busan Industrial Co | SS TECH vs. Busan Ind | SS TECH vs. Shinhan WTI Futures |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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